GR 91307; (January, 1991) (Digest)
G.R. No. 91307 ; January 24, 1991
SINGER SEWING MACHINE COMPANY, petitioner vs. HON. FRANKLIN M. DRILON, MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB), respondents.
FACTS
On February 15, 1989, private respondent Singer Machine Collectors Union-Baguio (SIMACUB) filed a petition for direct certification as the sole and exclusive bargaining agent for all collectors of the Singer Sewing Machine Company’s Baguio City branch. The Company opposed the petition, contending that the union members were not employees but independent contractors, as evidenced by the Collection Agency Agreements they had signed. The Med-Arbiter, finding an employer-employee relationship, granted the petition for a certification election. This decision was affirmed on appeal by then Labor Secretary Franklin M. Drilon.
The Company elevated the case to the Supreme Court via certiorari, alleging grave abuse of discretion. It argued that the Department of Labor and Employment (DOLE) had no jurisdiction as the existence of an employer-employee relationship was in dispute, and that the public respondents erred in finding such a relationship. The union countered that the terms of the Agreement and the collectors’ integration into the Company’s business operations demonstrated an employment relationship, not independent contracting.
ISSUE
Whether or not an employer-employee relationship exists between Singer Sewing Machine Company and the members of SIMACUB, thereby entitling the union to seek certification as a collective bargaining agent.
RULING
The Supreme Court ruled that no employer-employee relationship exists; thus, the union members have no right to form a labor organization for collective bargaining purposes. The petition for certification election was ordered dismissed.
The Court applied the four-fold test, with the control test being the most determinative element. While the Collection Agency Agreement contained provisions that suggested some degree of control by the Company—such as requiring the use of company receipt forms, submission of regular reports, and meeting a monthly collection quota—these stipulations pertained merely to the results of the work. The Agreement explicitly designated the collectors as “independent contractors,” and its terms did not grant the Company control over the means and methods by which the collectors accomplished their tasks. The collectors were compensated purely by commission and a bonus, were required to post a cash bond, and the agreement was for a fixed term subject to renewal or cancellation. These conditions are indicative of an independent contractual relationship, not employment. Consequently, lacking the essential employer-employee relationship, the union members are ineligible to form a bargaining unit or petition for certification election. The orders of the Med-Arbiter and the Labor Secretary were reversed and set aside.